Brexit + Lockdown Shakes The UK Car Industry

The dynamic duo proves a nuisance for the automotive industry

In 2020, the car industry suffered widespread shutdowns of assembly lines as a strict lockdown was imposed and sales plummeted. Now, in 2021, another lockdown has been put in place and on top of that, Brexit has now officially happened causing mass disruption in various industries.

Many people believe the 2021 lockdown to be quite different from the one we saw in 2020 and although that is true for car manufacturers, it is not for the car dealerships. Car showrooms across the country have been forced to closed, no longer allowing people to view, test drive and purchase cars in-person and of course, viewing and buying a car is something that virtually always done in-person.

The decision to class car dealerships as part of the group of non-essential retailers that had to close was met with a lot of disagreement due to the large open and largely outdoor spaces that can be easily made COVID-secure.

The chief executive of the Society of Motor Manufacturers and Traders (SMMT), Mike Hawes, even said himself that “Auto manufacturing must have its showrooms open; it’s proven safe and secure, a very different environment from other retail premises.”

Car manufacturers, as well as other manufacturing sectors, continue to keep their assembly lines open, unlike in last year’s lockdown. The UK manufacturing industry is the 9th largest in the world, employing around 2.7 million people across the nation. 2020 saw car production grind to a halt, with a decrease in output of 99.7% in April, reportedly the lowest production output since WWII.

This year, however, will not see the same drastic halt in production as manufacturers are allowed to continue operations in a safe and secure way.

Although manufacturing can continue, many of the questions that Brexit has unearthed continue to go unanswered as few details were provided for the car industry regarding the new deal. Although the said deal will help guard the UK car industry against drastic tariffs, issues of new regulations, customs law and disturbance of supply chains remain unclear.

This kind of uncertainty has had a direct impact on Honda, with its Swindon plant having to close for two days due to global supply disruptions. Honda also had to halt production for a few days in December due to container ports experiencing disruption caused by COVID-19 as well as stockpiling in preparation for Brexit.

SMMT’s Mike Hawes commented “The paperwork … you used to do it on a minority of vehicles. Now you’re doing it on just about all your vehicles, apart for those that are going to the UK market,” explaining how added documentation will soon increase costs for manufacturers.

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